AFM231 Chapter Notes - Chapter 20: Independent Contractor, Occupational Safety And Health, The Employer

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Chapter 20: The Employment Relationship
Employment Law
- Engaging the services of others provide the means by which a business can carry out its
mission
- Employment is a relationship that provides a livelihood for a large portion of society
- Governed by common law with the exception of Quebec
- Federal and provincial jurisdiction
-Federal: make laws affect employees of federal gov’t and regulated industries (banks,
airline, broadcasting, railway, and shipping)  10%
-Provincial: make laws that affect everything else; employees of newspapers under here
- Laws include human rights legislation, employee welfare legislation  employment
standards, occupational health and safety standards, and workers’ compensation
- If union, have labour relations legislation
The Employment Relationship
A contract where one party, the employer, provides remuneration to another, the employee, in
return for work or services.
Independent contractor: a person who is in a working relationship that doesn’t meet the
criteria of employment.
- Usually doctors or lawyers who aren’t actual employees of their clients
- Benefits: tax savings, flexibility, and independence in arranging a work schedule
- Employers like it cuz it’s simple and fewer financial and legal obligations
Employee vs. Independent Contractor
- Employee LT and contractor ST
Under law, it distinguishes them like this:
- The degree of control exercised over the individual by the employer
oHigher the control by employer the more likely employment
- The ownership of tools, chance of profit, and risk of loss from performance of the
requested service
oSharing profits and loss indicates independent contractor
- The degree of integration
oNature of work considered in relation to business
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oThe more “integral” or “adjunct” to the normal work of the business more likely
employment
Implications of an Employment Relationship
- Employees have statutory rights and benefits like paid holidays and paid OT (not
conferred on independent contractors)
- Employers have obligations  deduction of income taxes and EI premiums, payment of
CPP premiums, provision of paid vacations, etc.
- Establishing employment relationship is impt for certain legal principles
- Ie vicarious liability for employees but not independent contractor
oUnless the contractor is an agent of the employer
- Employee can initiate action for wrongful dismissal but not independent contractor
Risks in Hiring
Vicarious Liability
- An employer is liable for torts of an employee that are committed in the ordinary course
or scope of employment
- Employee’s wrongful conduct is within the ordinary course or scope of employment if
authorized by the employer
oSame applies even if it is an unauthorized mode of doing something as long as
its authorized by the employer
- The employer will be vicariously liable if there is a significant connection between the
wrongful acts of the employee and the creation or enhancement of the risk of the
wrongful act by the employer
Justifications for holding employers responsible for their employees’ actions include:
- Employers have ability to control employees and therefore should be liable for conduct
- Employers benefit from the work of the employees and therefore should be responsible
for liability incurred by employees
- Employers are usually in a better position that employees to pay damages
oEnsure innocent victim is compensated
- Employers have an incentive to try to prevent torts from occurring in the first place
Vicarious liability doesn’t relieve employee liability. Both employee and employer might be liable.
Employee could also be liable for breach of employment contract – rare cuz employee probably
can’t pay damages and negative publicity would hurt
Negligent Hiring
- If employee injures another employee or causes harm to third party, may be action
against the employer for negligent in hiring
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